The reference price to be used for calculating the extent of anti-dumping duty to be levied on imports of solar glass from China and Vietnam has the solar power developers worried.

The developers are worried that it will escalate the cost of the existing projects thus making them unviable and seeking deferment of imposition of dumping duty until India develops sufficient toughened glass production capacity to meet the demands of solar power capacity addition.

Without adequate domestic manufacturing, this could pose significant challenges to the renewable energy sector and India’s energy transition goals, Independent Power Producers (IPPs) argued.

The Finance Ministry has recently notified correction in the anti-dumping duty calculation on “Textured Tempered Coated and Uncoated Glass”.  

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According to the notification, the applicable rate shall be the difference between the landed cost of imports, including Basic Customs Duty, and the reference price. This is not a fixed quantum Anti-Dumping Duty.

This decision was made after considering an application filed by Solar Ancillary Manufacturers’ Association (SAMA) — established on August 1, 2024, by Borosil Renewables Ltd and five other founding members.

The notification said that in the matter of “Textured Tempered Coated and Uncoated Glass” originating in or exported from China PR and Vietnam and imported into India, it was found by the designated authority in its preliminary findings that the goods exported to India from these countries were at dumped prices.

It was also found that there was substantial increase in imports of these goods from the said countries in both absolute terms and in relation to production and consumption.

This has led to the domestic industry suffering. Therefore, it recommended imposition of provisional anti-dumping duty on imports of these goods, originating in, or exported from the said countries and imported into India.

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According to SAMA’s calculation the impact of this Anti-Dumping Duty based on the reference price for imports from China, on the cost of a solar module vis-à-vis the average landed import prices will be 48 paise per watt peak for a conventional module with back sheet and 63 paise per watt peak for a 2mm glass/glass module.

In the case of imports from Vietnam the impact of Anti-Dumping Duty on the significantly lower reference price shall be much less —29 paise per watt peak for a conventional module with back sheet and 41 paise per watt peak for a 2mm glass/glass module.

The move is meant to be good for the solar industry, but according to the developers it is now going to increase the panel costs and also the project costs will need to be reworked.

According to developers, a rough calculation done by industry shows the price hike would be in the range of Rupee one to ₹2.50 per watt calculated at the reference price of $677 per MT (1,000 kg).

Taking an exchange rate of ₹85 for every dollar the effective duty rate comes to ₹57.5 per kg. Average weight of glass in a solar panel is 24-25 kg so the added cost will be about ₹1,439 Kg.

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This would mean for a 550 MW panel cost increase per watt peak will be ₹2.62, an Independent Power Producer said.

IPPs may need to consider invoking the ‘Change in Law’ clause to address these additional costs and ensure financial viability.

Developers face additional costs due to duties on raw materials, along with ambiguity over regulatory approval for claims under “change in law.”